President-elect Donald Trump said he plans to shut down his charitable foundation, a decision that comes after repeated controversies over how it collected and disbursed funds.
In a statement Saturday, Trump offered no timeline for when his foundation would close down, but he said he had directed his attorney to take the steps needed to close the charity. It was also not immediately clear when the foundation would be able to dissolve, given an ongoing investigation in New York.
“The Foundation has done enormous good works over the years in contributing millions of dollars to countless worthy groups, including supporting veterans, law enforcement officers and children,” Trump said in the statement. “However, to avoid even the appearance of any conflict with my role as President I have decided to continue to pursue my strong interest in philanthropy in other ways.”
The Donald J. Trump Foundation has come under intense scrutiny this year after a series of reports in The Washington Post detailing its practices, including cases in which Trump apparently used the charity’s money to settle lawsuits involving his for-profit businesses.
New York’s attorney general has been investigating the charity after some of these reports, and a spokeswoman for that office said the foundation could not officially shut down until that probe is over.
“The Trump Foundation is still under investigation by this office and cannot legally dissolve until that investigation is complete,” Amy Spitalnick, the spokeswoman, said Saturday in an email.
The foundation is unusual in that it largely collects and donates money from other people. In fact, from 2009 to 2014, Trump told the Internal Revenue Service that he had given his namesake foundation no money at all. The biggest donors in recent years were Vince and Linda McMahon, the pro-wrestling magnates, who gave the Trump Foundation $5 million between 2007 and 2009. Trump recently nominated Linda McMahon to head the Small Business Administration.
Trump said Saturday that he was “very proud of the fact that the Foundation has operated at essentially no cost for decades, with 100% of the money going to charity.” The Trump Foundation has no paid employees and a board of five, consisting of Trump, three of his children and a longtime Trump Organization employee. They all work a half-hour per week, according to an IRS filing.
The president-elect added that “because I will be devoting so much time and energy to the Presidency and solving the many problems facing our country and the world, I don’t want to allow good work to be associated with a possible conflict of interest.”
The foundation told the IRS that it had $1.16 million in total assets by the end of 2015, the most recent tax filing available. A spokeswoman for Trump said she had no additional information Saturday regarding where any remaining money might be sent.
Trump’s foundation has admitted in IRS tax filings for 2015 that it violated a prohibition against “self-dealing” that says nonprofit leaders cannot use their charity’s funds to help themselves, their relatives or their businesses.
In these tax filings, the charity checked “yes” in response to a question asking whether it had transferred any income or assets to “a disqualified person” – a description that could have meant Trump, a relative or a Trump-owned business.
Trump has not said what exactly he did to violate the rule, or what he has paid the IRS in penalty taxes as a result. The IRS has not commented when asked whether it was investigating the Trump Foundation.
Trump’s charity has been prohibited from fundraising by the office of New York Attorney General Eric Schneiderman, an action that came after The Post reported that the foundation had failed to register with the state. This meant the foundation had dodged annual audits required in the state of New York.
Schneiderman’s office is also investigating the Trump Foundation after reports in The Post describing apparent cases of self-dealing that date back to 2007. The Trump Foundation spent $30,000 to buy two large portraits of Trump himself, including one that was hung in the sports bar at a Trump-owned resort. Trump also appears to use $258,000 of his foundation’s money – legally earmarked for charitable purposes - to settle lawsuits involving two of his for-profit clubs.
In addition, the Trump Foundation gave a $25,000 gift to a campaign committee backing Florida Attorney General Pam Bondi even though nonprofit organizations such as the charity are not allowed to give political gifts. That gift was made as Bondi’s office was considering whether to investigate fraud allegations against Trump University. A consultant who worked on Bondi’s reelection effort has said that Bondi was not aware of the complaints when she solicited the donation from Trump. Ultimately, Bondi’s office did not pursue those allegations.
The move to shut down Trump’s foundation, first reported Saturday by the New York Times, comes as the president-elect and his family are facing intense questions regarding how they will avoid conflicts of interest while he is in the White House.
“The announcement that the Foundation will be shut down is a necessary first step for the incoming administration to avoid massive ethics problems, but it does not come close to ending the story,” said Noah Bookbinder, executive director of Citizens for Responsibility and Ethics in Washington, a watchdog group aligned with allies of Democratic presidential nominee Hillary Clinton. The group’s tips and research helped reveal some of the Trump foundation’s apparent violations of the law.
In a statement, Bookbinder said that the Trump charity’s “past instances of wrongdoing must be fully investigated” and called on the president-elect to “sell his businesses and take comprehensive steps to prevent conflicts of interest for him and his administration.”
Trump has said his two adult sons will run his company, but he has not provided details about how he will extricate himself from his complex network of businesses. He postponed a news conference this month meant to address the issue and has not rescheduled it.
In another case of Trump apparently trying to wrap up lingering questions and legal issues before he takes office, he agreed to settle fraud claims against his defunct Trump University real estate seminars. A federal judge on Tuesday gave preliminary approval to a deal in which Trump would pay $25 million as part of the settlement.
Last week, Trump’s eldest son, Eric, said he was suspending his charitable foundation after facing questions about whether donors could receive special access.
The Eric Trump Foundation, founded in 2007, raises more than $1.5 million a year through a golf tournament and other events, and it passes on the bulk of its money to St. Jude Children’s Research Hospital, a pediatric-cancer center in Memphis.
The president-elect was critical of the circumstances that led to the decision about his son’s foundation, describing it as unfair in a pair of messageson Twitter.
“Isn’t this a ridiculous shame?” the elder Trump wrote. “He loves these kids, has raised millions of dollars for them, and now must stop. Wrong answer!”